However, the interest on projected issue of Bulgarian government bonds will be between 5 and 6 percent. This is the common opinion of the Bulgarian financiers and analysts.
The same are the expectations of the Finance Minister Simeon Dyankov. His hope is the interest on the new loan to be lower than that of the loan taken by ex-FinMin Velchev several years ago. The debt, which is to be repaid in January 2013 was accumulated at a 7.5-percent interest, and that due in 2015 – at 8.25%. Maybe we can negotiate bonds bearing 2-2.5 percentage points lower interest rates, Minister of Finance said.
Analyst Georgi Angelov predicted for the BANKER that if the issue is sold in July and bonds are of a ten-year repayment period they will pay an interest of around 6%, and if they are for five years – between 5% and 6%.
If Dyankov manages to choose the right moment and radiate strong positive signals for the development of Bulgaria, the interest rate may fall below 5 percent, but I think this is rather optimistic, Angelov said. It is important that government does no wrong steps endash for example spending the Silver Fund, and not embark on any populist ideas and goals, Mr. Angelov said.
Financier Emil Harsev also believes that an interest rate below 5% is possible. Nobody can expect lower interest rates than 4.5% or 4% but anything below 5% will show how strong the confidence of creditors in Bulgaria is, Mr. Harsev told the BANKER.
He argues that the preparation of the issue is in an advance stage, and that who the investors will be is clear and did not exclude the possibility of the transaction taking place by the end of June.
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Bulgaria ranks 18th among the countries threatened by insolvency. In the first place is Greece. The ranking has been made by Business Insider.
A year ago, despite a low foreign debt Bulgaria was 20th on the list between 65 countries around the world who are threatened by bankruptcy. It was compiled by the international rating agency Credit Market Analysis. The countryrquote s new position is due to the fact that the rating agency has not used as a base the deficit and debt ratios – leading indicators in the EU endash but the appreciation of insurances on government securities. Typically, insurance on bonds issued by a country to finance its deficit from foreign markets, increase with the risk.
